The Full Story on Medicare Cuts | Casey's Last Word

If you’ve been watching the Republican National Convention this week, you’ve repeatedly heard the allegation that the Obama Administration is stealing more than $700 billion from Medicare.

It’s taking money from seniors to help fund coverage for low-income folks under what Republicans call Obamacare.

This is much like some other political statements – such as the pro-Obama super-PAC’s commercial suggesting that Mitt Romney’s closing of a plant caused a woman’s death by cancer.

The reality is a bit more complicated.

The $700 billion-plus in Medicare savings doesn’t come from cuts in services, but mainly through negotiations with various providers.

One of these providers is the nation’s hospitals.

During the drafting of the bill in 2009 and 2010, Senate negotiators and the White House cut a deal with the national hospital associations.

Beginning in 2014, the hospitals would take a cut of $100 billion in Medicare reimbursements over a period of 10 years.

But they agreed to this only after their own calculations determined that the expansion of Medicaid – federal coverage for low-income people – would more than make up the lost revenue.

So Medicare patients won’t see their services cut.

The hospitals simply agreed to cut their Medicare rates in order to increase their business.

But Texas hospitals now have a problem.

The part of the Affordable Care Act that cuts their Medicare rates is still in the law, but the U.S. Supreme Court has made the expansion of Medicaid to millions more patients optional.

And Governor Rick Perry says Texas, which leads the nation in uninsured citizens at about 25 percent, will opt out.

In other words, Texas hospitals get only half the deal – the half that hurts.

How much the half-a-deal will hurt San Antonio area hospitals has not yet been tallied.

It could send some from the black into the red.

But officials at Bexar County’s University Hospital, which is funded with property taxes, had projected that in 2014, the expansion of Medicaid would save county taxpayers more than $53 million annually.

That’s why George Hernandez, CEO of the University Health System, is floating the idea of trying to get the Legislature to authorize Texas’s large urban counties to negotiate directly with the federal government to expand Medicaid.

Other large counties are showing an interest, but no push will get underway until after the presidential election.

If the Republicans win the White House and the Senate, the issue is likely moot.

But if Obama should win re-election, is there any chance the Texas Legislature, with an increased Tea-Party contingent, would go along?

And wouldn’t the governor veto it?

It’s a tough sell.

Hernandez’s proposal has only one chance.

That’s if major business contributors to Republicans in Austin strongly urge the politicians not to deprive the Texas economy of the billions of federal dollars that Medicaid expansion would inject into the state.

And with the bonus that it would cut our ranks of the uninsured.